Regarding foreign trade, documentation ensures that goods can cross borders quickly and without problems. Even a small mistake can cause packages to be held up at customs, which may result in funds and make business relationships more difficult. The Shipper’s Letter of Instruction, or SLI, is one of these documents that is often forgotten but is highly significant. What is an SLI, and why is it so important? This is a question that many people who have never exported ask. To avoid making a mistake that costs a lot of money, it’s important to understand this paper and the correct shipper letter of instruction format that exporters should follow.

What is an SLI?

A Shipper’s Letter of Instruction (SLI) is a letter the exporter writes to give a freight forwarder or carrier clear instructions. Its primary objective is to ensure the shipment is treated exactly as the exporter wants, so there is no room for confusion. In the same way, the SLI is often used as a permission letter, giving the forwarder the power to file export data like the Electronic Export Information (EEI) in the United States on behalf of the exporter.

The SLI is both a set of instructions and a legal permit. By giving it out, exporters clarify how their goods should be handled during shipping and protect themselves from being held responsible if mistakes are made later.

Is the Shipper’s Letter of Instruction necessary?

What you need to do to get an SLI changes from country to country. Some places don’t require it by law, but it’s become standard practice in the business. In the US, for example, most freight forwarders won’t move a shipment until they get a finished SLI from the company that needs to file EEI data. 

In many other countries, the document is highly suggested, but not required by law. This is because it makes it easier to follow instructions and lowers the risk of disagreements.

Because of this, making an SLI is always a good idea, even if it’s not required in your area. It shows that you are a professional, keeps you from making mistakes, and ensures you follow the export control rules.

How Does the SLI Matter So Much?

Having the Shipper’s Letter of Instruction is important because it lets the seller and the forwarder talk to each other. It prevents mistakes by writing down information about the shipment and showing that the exporter gave clear directions. This keeps the buyer from having to pay for something that goes wrong. 

The SLI is also very important for ensuring that important documentation, like the Bill of Lading or Air Waybill, is filled out properly, since the forwarder relies on it. Without it, the forwarder might have made assumptions, which could cause problems with customs, packages going in the wrong direction, or fines.

Format for Shipper Instruction Letter

Most SLI templates include the following, though forwarder and country formats differ.

• Exporter’s details
• Consignee information
• Intermediate consignee (if any) 
• Freight forwarder/agent information 
• Shipment details
• Cargo description
• Compliance data 
• Supporting documents 
• Authorization statement 

Also Read This: What are Different Types of Factoring in Export?

Guidelines for Exporters to Follow

When importers make an SLI, they must ensure that every detail matches what’s on other papers, like the packing list and invoice. Even minor mistakes can cause customs delays. 

To keep things clear, product details should be clear and specific, and Incoterms® should completely match the terms of sale agreed upon between the seller and the buyer. Also, you should keep a copy of every SLI for your own records and for checks.

Many exporters find it easier to do things when their freight forwarders give them standard forms. This makes it possible that important information will be lost, and sets up a reliable way to finish the paper. Over time, exporters can save time and effort by setting up an internal method for consistently making SLIs.

SLI vs. Other Export Documents

People often confuse the SLI with other trade documents, although it serves a specific purpose. A business invoice is a financial document used to determine customs duties. 

An SLI, on the other hand, is a document with instructions for the freight forwarder. In the same way, the carrier gives out a Bill of Lading or an Air Waybill as proof that the goods have been shipped. Along with the forwarder, the SLI helps them prepare those papers earlier.

What You Should Do If You Miss a SLI

If exporters don’t go through the SLI, they could face big trouble. Without it, a forwarder could enter wrong information when filing for customs or make mistakes when making shipping papers. This could lead to fines, late shipments, or conflicts between trade partners. 

The exporter’s directions are written down in an SLI, which can help prove a dispute. By taking a few extra minutes to prepare the document in the correct shipper letter of instruction format, exporters avoid paying much more money in the future.

Wrapping It Up

The Shipper’s Letter of Instruction is a brief but important piece of writing. It ensures that exporters and freight forwarders are on the same page, gives legal permission when needed, and keeps packages safe from mistakes and problems with compliance. Suppose exporters follow the proper shipper letter of instruction format and see it as an important part of the shipping process. In that case, they can make foreign trade safer, smoother, and more reliable.

The SLI should never be considered optional for companies new to selling. It is an important tool that makes operations easier and keeps international trade going without leaving too many at risk.

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